1. Foreign Aid:After a disastrous encounter with Covid-19, Ethiopia receives a sizeable foreign aid package. Assume the aid doubles Ethiopia's current capital stock at t=10. There is no change in parameters.
   1. Explain and illustrate how output, capital, and investment evolve.
   2. By what proportion does consumption per person initially increase? What happens to consumption in the long run?
   3. Suppose instead of starting in its steady state, Ethiopia's economy begins below its steady-state, with a capital stock equal to half the steady-state value. Answer the same questions above for this case.
   4. Summarize what this exercise teaches you about the possible consequences of foreign aid. In this example, does foreign aid exert a long-run effect on the welfare of developing countries? What is the benefit of foreign aid? Should rich countries continue the policy of cash foreign aid?